Public Bill Committee

[Robert Key in the Chair]

Written evidence to be reported to the House

H 10 Japan Tobacco International
H 11 British Medical Association
H 12 Sinclair Collis
H 13 National Federation of Retail Newsagents

Robert Key: Good morning. It is amazing what some people will do to avoid chairing the Committee.

Clause 11

Direct payments for health care

Stephen O'Brien: I beg to move amendment 16 , in clause 11, page 8, line 29, after Trust, insert
and may also provide for an appeals process.

Robert Key: With this it will be convenient to discuss the following: amendment 190, in clause 11, page 8, line 29, at end insert
(4A) Any overpayment made by the Secretary of State shall not be recoverable under subsection (4)..
Amendment 191, in clause 11, page 8, line 29, at end insert
(4A) The regulations may make provision for the use of any surplus arising from the direct payment by
(a) the patient; and
(b) the Secretary of State.

Stephen O'Brien: Good morning, Mr. Key. Somewhat to our surprise, but great pleasure, we find ourselves serving under your chairmanship. Thank you for stepping into the breach to ensure that we have a continuing, uninterrupted consideration of the Bill. We look forward to making good progress.
Amendment 16 aims to protect individuals from the unwarranted removal of money from them by the Secretary of State. We have seen how the Government are not beneath top-slicing PCTs to bring them into line, both financially and politically, to generate a central war chest. I am concerned that this provision could be used to do the same to those with direct payments, and I hope that the Minister will reassure us on that.
Amendment 190 comes in the light of the Governments tax credit and other fiascos. Will the Minister confirm that if overpayments are accidentally made, the Government will bear responsibility and not the individual, and, above all, that the individual will not be at risk of the cost for such error, inadvertency, incompetence or plain negligence?
Amendment 191 questions what plans the Government have for surpluses in the direct payment. Will the patient be able to transfer some of it for personal use? That might reward and incentivise the efficient use of resources. Would it roll over to the next year, or would it be clawed back by the PCT or the Department? If so, how would efficiency be incentivised? The Minister half covered that, somewhat affirmatively, in the reply he gave last week. So I look forward to his confirming and amplifying that.
I am concerned by paragraph 136 in the explanatory notes, which states that new section 12B(2)(h) means that the Secretary of State
may or must require all or part of direct payments to be repaid, for example, when a significant surplus has accumulated.
No cause is given for that, just the fact of accumulation. What does the Minister classify as significant? Surely the circumstances in which the surplus accumulated should be taken into account. The reverse is, of course, when there is not enough money in the tin; in the other place, Baroness Masham pointed out that it had happened to her in social care. I hope the Minister bears that in mind when he responds.

Mike O'Brien: May I welcome you to your post, Mr. Key? It is a great pleasure to serve under your chairmanship and I hope that we make speedy progress under your tutelage.
Amendment 16 provides for creating an appeals process where money given in direct payment needs to be reclaimed by the NHS, such as in the event of fraud or abuse. I support the principle that if money given through a direct payment is to be reclaimed, then the process for doing so should be fair and transparent, and the individual shouldand doeshave the right to redress. That right is clearly set out in the NHS constitution. Any complaint about NHS services should be dealt with efficiently and investigated properly. The NHS complaints procedure has recently been reformed to make it more efficient and robust.
A complaints procedure would apply to any decision to reclaim a direct payment. Moreover, if not satisfied by that procedure, a patient may ask the health service ombudsman to look into the case. Clause 12 expands the role of the ombudsman to cover services delivered through direct payments precisely to ensure that people are suitably protected. It is worth reiterating that PCTs providing direct payments are still providing NHS services, and patients are still covered by all safeguards protecting them and their dealings with PCTs.
Amendment 190 would exclude repayment of a direct payment where the Secretary of State has made an overpayment. We think that if a certain amount of money has been applied, it is for achievement of a particular purpose. If that purpose is achieved, a review will need to be taken into the surplus. This case is different from care cases in that an amount of money has been agreed for a person with a prolonged illness or condition and they would be expected to use that money to manage their condition. If they are able to do that more efficiently, effectively and cheaply than the PCT, that is finethe money should be deployed in maintaining and improving that condition. Provided it is for that purpose, it should be possible to negotiate and agree to it. However, it may be that the amount of funding initially agreed is in excess of that required and a mistake has been made, and it is right that a review should take place at that stage and that a determination should be made about whether the appropriate figure was or was not calculated at the beginning. We want to ensure that those who use their funding efficiently are able to retain it for a similar purpose within the context of their care and budget. We do not want a situation where, should there be a miscalculation or an issue arises that should not have arisen, somebody ends up not deploying money for their care.
There is broad agreement that that is the outcome that we want. With regard to the Secretary of State recovering money to build up a war chest, we are not talking about amounts that would make a big difference to the national health budget one way or the other. Initially we are looking at 70 or so projects, which would assess whether the process of direct payments can be refined and expanded or whether we want to change it in some other way. Building up a war chest is unlikely and I assure the hon. Gentleman that the Government would not contemplate that. Frankly, it would be pointless given the sums involved.
Regular monitoring will ensure that any surpluses or shortfalls in budget are identified quickly. It is important that we not only deal with surpluses but also budgets that are underfunded, where the money is insufficient to remedy that; it needs to work both ways. That is the objective and I hope with those assurances that amendments 16 can be withdrawn by the Opposition.

Stephen O'Brien: I have listened to the assurances and I am glad to say that my concerns are somewhat assuaged. I still have a concern about the building up of a war chest, which the Minister sought to dismiss. Clearly, while we are in the pilot stage, what he says in terms of the sums of money must be right, but if the pilot is to mean anythingwe are about to come on to thiswhen it is rolled out throughout the country, the cumulative amounts of money will be potentially significant. We need to get the principle and the ideas right now; that is the purpose of this scrutiny.
If there is a surplus that can be applied effectively in support of the purpose for which it is given, it is in effect one of the motivators to efficient procurement and the necessary contestability for getting higher quality services. I think that we are at one on that. My remaining concern, which might need to explore on Report, is how one defines purpose, given that at the moment the word significant is used. As part of his answer, the Minister sought to distinguish purpose from miscalculation. In practice this could be important because there will be residual worry for people in receipt of payments that they could suddenly be clawed back. People make their dispositions on the understanding that they have the amounts that they have been granted.

Mike O'Brien: Just to reassure the hon. Gentleman, it is not our intention to claw back funding where people have made dispositions and, as a result, created a surplus through efficiency. This is provided that the surplus is to be deployed for the purpose of the health budget. If, for example, the persons condition had ceased, that might be a factor that would need to be reviewed. The aim is not to claw back moneys that, because of efficiency, had arisen as a surplus.

Stephen O'Brien: That added assurance is helpful, and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Stephen O'Brien: I beg to move amendment 192, in clause 11, page 8, line 29, at end insert
(4A) The maximum period permissible in regulations made under subsection (3) is three years..
This deals with limiting pilot length. New section 12C subsection (3) reads:
A pilot scheme must, in accordance with the regulations, specify the period for which it has effect, subject to the extension of that period by the Secretary of State in accordance with the regulations.
This is a far-reaching power that would enable the Secretary of State to prolong the pilot, even indefinitely, if he wanted to. The noble Lord Darzi in the other place said:
We intend the personal health budgets pilot programme to run for at least three years, with direct payments being used for at least two years.[Official Report, House of Lords, 2 March 2009; Vol. 708, c. GC251.]
This was in response to a reverse point by Baroness Barker about the individual budget pilots. In some places the Government organised thosewe would argueso badly that people had been using them for only a few weeks or months before they came to be assessed. This was admitted by researchers in the IBSEN report. If Lord Darzi is content that three years is the time taken to run a pilot, it seems sensible that it should be on the face of the Bill at least as a benchmark expectation, if nothing else.

Mike O'Brien: The hon. Gentleman is right, but my noble Friend Lord Darzi had suggested in the other place that it is our intention to pilot health care payments. The maximum limit will be a period of three years. Most projects with direct payments will take around two. The system will take some time to set up, so we will have a set-up time, the running time and then an evaluation period. The aim is that we should be able to have a three-year block area where about 70 projects can be properly evaluated. They will have slightly different start-up and finish times.
The drafted provisions require the period for which a pilot would run to be defined and we expect most sites to be authorised within two or three years. However, it may be the case that a site takes longer to report than anticipated, either due to local circumstances or an unforeseen complication. We would therefore need flexibility to extend the period of the pilot to more than three years if necessary, in order properly to evaluate that site. The Bill allows for this but the amendment would prevent that from happening, so I hope the hon. Gentleman will feel able to withdraw it.
Essentially, in terms of getting this done, we need to have a block of time where we can set it up, ask for the various bids to be examined and allocate the funding. Then, we can start to run the projects, provide the level of support that they need, get to the end, evaluate it and have an outturn date which is within approximately three years of the start of the pilot schemes. That is why there is a difference in terms of two to three years.

Stephen O'Brien: I will not press this to a Division. This exchange is on record, so those who are concerned about understanding the way forward have a clear idea that the maximum limit is expected to be three years, with most taking two. The Minister will be aware that our concern arises because of the Governments track record in relation to pilots. We have often had pilots without the follow-through, so we now want to ensure that there is a clear programme that is expected not only to evaluate them well, perhaps with this reserve power that if one or two stray over the time they can have their evidence captured for the general application, but above all to make sure that there is an expectation of roll-out. On that basis, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Sandra Gidley: I beg to move amendment 171, in clause 11, page 9, line 14, at end insert
(4A) The regulations must make provision that the pilot schemes are fully completed before a recommendation is laid before Parliament..

Robert Key: With this it will be convenient to discuss the following: amendment 172, in clause 11, page 9, line 17, at end insert
(aa) for a review to be carried out that involves patients, staff, voluntary organisations and representative bodies..
Amendment 132, in clause 11, page 9, line 26, at end insert
(d) the impact of direct payments on health inequalities..

Sandra Gidley: I extend my welcome to you in the Chair, Mr. Key. Amendments 171 and 172 aim to ensure that any pilots of direct payments are completed and would be reviewed, not only by an independent person, but also by patients, staff and voluntary and representative bodies. The number of amendments that have been tabled around review reflects a concern that, very often, pilots are not properly evaluated before they are implemented in the NHS. With regard to amendment 132, about which I shall talk briefly, it is right to consider the impact on health inequality, but all the evidence shows that most public health projects are poorly evaluated and there is little evidence about what works and what does not, although there are lots of well meaning projects out there. This is an attempt to focus attention on the review methodologies beforehandwe need to have in place, at the outset, some idea of what impacts we are looking for from direct payments.
In the other place Lord Darzi said:
Our general intention is that the pilots should be clearly defined from the start
the Minister has just confirmed that
I can put on record our intention to evaluate all the direct payment pilot schemes, not just some of them...We intend the personal health budgets pilot programme to run for at least three years with direct payments being used for at least two years. The one-year requirement is surpassed by our policy.[Official Report, House of Lords, 2 March 2009; Vol. 708, c. GC252.]
The Minister did not commit, however, to completing the pilot project, or formally to reviewing, or consulting upon, the outcome of the pilots. The consequences of such a major change to the delivery of health services, especially to the intended group of direct payment recipients, should really not be rushed. A number of concerns have previously been raised about that. Direct payments for social care have been in place for some time, but there are many differences between health and social care, which were highlighted in a previous sitting.
It would be useful to hear from the Government that there will be proper evaluation before a final recommendation is made to Parliament. The reason for including voluntary organisations and staff organisations is that there may be significant unforeseen impacts on NHS staff. It is always useful to consult with user groupsI hate the term service user, but it seems to be the current jargonbecause they will be aware of the real-life implications that affect people on the ground, which are not always picked up using formal methodologies. These amendments are an attempt to seek the Ministers reassurance that all these factors will be taken into account.

Stephen O'Brien: I am happy to support amendment 172, which relates to points that we have made before on LINks, and the hon. Lady includes staff groups and so forth. On amendment 171, we clearly have to get the balance right between making sure that the evidence base is there and that we are not unduly complicating things. I hope the Minister will give us an assurance that the pilot schemes will have a significant period to run before they are reviewed, because of the example we have had. To some degree, it is the mirror image of what we discussed on the last point.
Our amendment 132 concerns the Governments figures on health inequalities. The reason I am very anxious to include the effect that direct payments have on health inequalities is partly because I think it is common sense that they will have a major effect and it would be something of a dereliction of duty if that were not properly taken into account and measured. We are conscious, as we consider the Bill, that the inequality gap in infant mortality rates has not reduced sufficiently to meet the Governments target. The inequality gaps in male and female life expectancy at birth have both increased since the baseline, by 2 per cent. for men and 5 per cent. for women. If trends continue, the Governments targets will also not be met. The relative gap between the routine and manual groups in the population has widened over recent years since the target baseline, and the number of sexually transmitted infections has doubled over recent years. Because of this inability to address the inequality and poverty that have affected areas even beyond health policyhealth is a key weather vane in respect of inequalitiesa proper measure of effectiveness of direct payments will be the impact that they make on this poor record.

John Horam: Further to the point made by my hon. Friend the Member for Eddisbury on health inequalities, the Minister will be aware that there are considerable differences. Even in an affluent borough such as Bromley, there are areas where health is much worse than the average for the country, never mind for Bromley. This may reflect my ignorance, but what is the size of this pilot project? Does it cover the whole Primary Care Trust or is it a much smaller area? Is it a group of patients attached to one general practitioner? What size is it? This is important. Will the number of pilots reflect the health inequalities throughout the country. Clearly, we need to take bad areas and good areas and average areas in order to get some sort of feel about how direct payments will work.

Mike O'Brien: It is our intention that we should properly evaluate all these trials. These pilots are enormously important for assessing the impact of direct payments and it is right that we should have a full and comprehensive evaluation of them. The Liberal Democrats amendment would mean that we could not move forward with direct payments until all of the pilots had been completed. Some of the pilots may be delayed for all sorts of reasons. They may go beyond three years. They may have to carry on because of the health condition of individuals. Therefore we want some flexibility in the way in which we deliver the evaluation. We also need to make sure, however, that this evaluation is comprehensive. This is why we have a spread of 70 projects across a range of types of income, area and condition, so that we can have a proper assessment of where these projects would bring benefits from direct payments and where they would not. The hon. Member for Romsey is right to say that we need fully to evaluate this and that therefore we cannot try to rush through the evaluation. The evaluation, however, will be going on alongside the pilot. We do not necessarily always have to wait until the end before much of the work on evaluation takes place. One of the things we have to evaluate is how we get applications in. How well is it done? Who gets them? This can be done early on therefore and it can be evaluated well within the initial year. Therefore, we have a process of evaluation that evaluates the different stages of the pilot and identifies what works and what does not work. The main evaluation, however, will have to wait until the end so that we can look at the impact it has had on individuals.
We want to ensure that we involve all the key stakeholdersthe patients, the staff, the voluntary organisations, the representative bodiesin looking at how direct payments work. It will be important in evaluating the impact of direct payments on particular conditions how not only individuals react to the handling of funding for direct payments but also how the various patient groups see the implications of direct payments on that condition. We may end up with an outcome that says that for particular conditions direct payments are beneficial, while for other conditions they are not. That is probably where we will end up, but let us see where it goes. We need to have a broad spread of the various types of direct payment pilots. We then need to have a full and proper evaluation of them. We need to involve the various patient groups, and that is our intentionit is not necessary to spell it out in the Bill. This would not be an effective evaluation of an important step for the NHS unless we involved the patient groups. In our policy statement Personal Health Budgets: First Steps we have specified that one of the principles of personal health budgets is to tackle inequalities and protect equality. Our advertisement for the evaluation, which was published in April, specifically asked research teams, who are now being recruited to conduct those evaluations, to consider how the impact of personal health budgets differs between patient groups, looking not only at health conditions but also socio-economic groups and patient characteristics such as ethnicity. The advertisement also asked teams bidding for the evaluation to consider how easily individuals from different groups can access personal health budgets and the support that they would need to do so. We are in the process of selecting the evaluation teams to do that. They will be responsible for ensuring that the views of all relevant stakeholders are considered in the evaluation process and that the impact of direct payments on health inequalities is comprehensively reviewed.
In summary, we want a broad spread in the size and nature of the different pilots. We want to ensure that we are looking at the different characteristics of both income and condition and that we have a spread, where we are able to get that, of particular conditions.

John Horam: How many people will be involved in one particular pilot? What is the normal number that you would expect?

Mike O'Brien: The broad concern would be to target direct payments at individuals who have a particular medical condition to see if they can manage the budget in a way that best delivers for them. We are also looking at small groups of people who want to work together to evaluate their budgets to see how that would operate. We want to look at a spread of different types of project to see what works. I suspect that we will find that certain things work and others do not. Unless we have a wide enough spread, geographically and otherwise, we will not be able to carry out that evaluation at the end of the three-year period.

John Pugh: What would constitute a good result of a review of a pilot? A valid point could be made that the socio-economic groups exploit private payments in different ways, some to greater benefit and others lesser, and, as has been suggested, that may accentuate health inequities. If there is an improvement in how NHS resources are used, if there is a wholesale uplift in health care and the efficiency in which provision by the state affects health outcomes, the Government could reconcile themselves to thatpresumably in the same way that people sometimes argue for tax arrangements that may not produce more equity but produce greater productivity and benefits for the state as a whole. What is a bad outcome for a review? A degree of inequity could be introduced by the wholesale introduction of direct payments alongside a wholesale improvement in the efficient use of resources and perhaps wholesale improvements in health outcomes.

Mike O'Brien: That is a perceptive and important question. If direct payments accentuate inequalities, then they have failed. It is likely that some individuals will be better able to manage budgets than others. That may well be attributable to their level of education and various attributes of their medical condition. We will have to evaluate this with care. Our aim is to ensure that we do not accentuate inequalities, particularly social inequalities, and also that we have an efficient use of resources, but the primary reason we are introducing this is to see whether we can better ensure that the treatment of individuals is carried out so that they will get the highest benefit. It is not either to save money or to spend more. The amount of money is not the key issue; the key issue is, what is the real benefit? If we can, as a result of this, ensure that health service provision for groups of people or individuals, because of the nature of a particular long-term condition that they have, is improved, then we are looking at a success.
The evaluation will be quite tricky; I do not hide that from the hon. Gentleman at all. We will need to balance a number of factors, and at the end of the process we will have to make some judgments as to how and in what circumstances to proceed. That will be the result of the evaluation, which will be open and published and engage the various groups, and then Parliament will have to make a decision about whether it wishes to extend beyond the pilots, and if so, in what form. I hope that with those explanations, the amendments can be withdrawn and we can proceed with direct payments.

Stephen O'Brien: I was particularly interested in the intervention by my hon. Friend the Member for Orpington, who was asking, in effect, what the scale of the pilots will be. I understand from the Minister that there are about 70 projects currently in mind, of which some will be individuals, some will be groups and some could even be quite large groups. The issue, which I think the Minister was hinting at, is not only that there is an effort to ensure that these pilots have a proper, realistic and tough research-based evaluationwhich will be difficult, as the Minister made clearbut that it will be difficult, scientifically, to get a proper statistical distribution that will look across all the various types, conditions, circumstances, socio-economic backgrounds, and levels of educational attainment, and that will make a big difference. The big issue as I see it, which is why our amendment 132 is germaneI shall not press it to a vote, but we may want to come back to it on Report; it may even be something that the Government want to consider in order to improve the Bill on Reportrelates to the answer the Minister gave. He confirmed my motive, which was that this is not intended to exacerbate, but to help to address health inequalities, although the primary purpose is on an individual basis, where the ultimate test will be whether this helps to improve patient health outcomes, rather than detract or be high-differential in terms of cost. That is the important area, and a secondary benefit would be to help to address health inequalities.

Mike O'Brien: I agree with most of what the hon. Gentleman said, but he said that the pilots can apply to a group of people, even a large group; that is not the intention. They are primarily for personal budgets, but they might extend, say, to a couple of people with a particular medical condition living together, or a group of people with a particular medical condition, who would be able to manage personal budgets and are, perhaps, living in the same accommodation. We are not talking about large groups here; we are talking primarily about personal budgets for individuals and those who might want to work together as part of a personal budget project. I do not envisage that a large group of people would decide to have the money and run their own health system; that is not where we are at all.

Stephen O'Brien: I am grateful for that answer to my question. It was the question I was asked on Friday when I visited an excellent care and nursing home in my constituencyProspect House in Malpas. As there is a large collection of people there suffering from the same age-related conditions, there was a question mark as to whether there would be a pooled set of direct budgets, which would slightly defeat the aim of basing help on a personal needs-based assessment.
I am grateful for that intervention because it is clear the Minister has in mind that help is effectively to be directed at the patients on a personal basis. I hope that will clarify the matter for my hon. Friend the Member for Orpington. I will not press the amendment at this point, but I hope the Government will listen carefully and think about how to address this better in the final shape of the Bill.

Sandra Gidley: The Minister seems to be saying all the right things and there clearly is an intention to evaluate. Lessons could be learnt from social care because some of those early direct-payment trials were not terribly successful. It was only by continuing and modifying that we eventually ended up with a model that is acceptable to more people.
Some key questions have been asked today. My hon. Friend the Member for Southport hit the nail on the headif you are improving health generally that must be a good thing, but if you are further improving the health of people with a longer life expectancy, is that quite such a good thing? It is an argument we can bat around all day. What I am not clear about is the criteria for these pilots. Although I am happy to withdraw the amendment, it would be helpful if the Minister wrote to us outlining the methodology that will be used for evaluation. It seems that many of the pilots could have been set up in different ways. I am not quite sure how one would compare 70 different pilots, all of which apparently have small numbers of peoplesomething I had not realised. That is difficult. It would be helpful for the Committee to have more information about that before Report. It would also be useful to know how many patients are involved in these pilots. Fundamentally, ifas the Minister indicatedthe numbers are small, we could be making some quite significant changes to the NHS in the future with a small evidence base. If the Minister can provide us with that information it will be helpful. However, at this stage I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Sandra Gidley: I beg to move amendment 173, in clause 11, page 9, line 33, leave out lines 33 and 34.

Robert Key: With this it will be convenient to discuss amendment 142, in clause 11, page 9, line 34, after this, insert Part of this.

Sandra Gidley: The amendment would delete the entirety of paragraph (8)(b) from new section 12C, which allows any other provisions of the National Health Service Act 2006 to be amended, modified or repealedfor example, where it has become apparent that this is necessary for a general roll-out of direct payments. The reason for tabling the amendment was that new section 12C(8) contains a wide-ranging power to amend or modify the NHS Act. The Delegated Powers and Regulatory Reform Committee commented on that during its examination of the Bill. They described this as a Henry VIII power and concluded that it was
limited to facilitating the exercise of the powers to make direct payments.
Other organisations have raised concerns that in fact this may not be the case and there is no sunset clause here. Given that the Government would like to start pilot projects this year, it is somewhat surprising; the inclusion of a sunset clause would reassure people that the power was only limited to the direct payments. This is to seek clarification on the Governments intentions, because it is a wide-ranging power and could have been restricted if that was the sole purpose of its inclusion in the Bill.

Stephen O'Brien: Both amendments seek to limit the apparently wide-ranging powers introduced for the Secretary of State over the 2006 Act. Subsection (9) clearly limits those powers, but the power is still vast, as the Secretary of State needs only to be able to state that the action is in regard to direct payments to wield it. It is, though, subject to the affirmative resolution. In terms of the amendment, this is a Henry VIII power, although Lord Justice Laws suggestedI think in the 2002 metric martyrs casethat it was unfair to attribute such powers to His late Majesty, who reigned 100 years before the civil war, and longer yet before the establishment of parliamentary legislative supremacy. I hope the Minister can confirm whether the power could be used to remove the measures that restrict this to pilots as much as to remove the pilots from the 2006 Act altogether.

Mike O'Brien: Allowing the Secretary of State to make an order repealing the limitation that direct payments may be made in pilot schemes only is the aim of new section 12C of the 2006 Act. It provides a power, effectively, to extend direct payments nationally should the pilots be successful. That is the objective of the exercise. Amendment 173 would remove that provision and amendment 142 would significantly restrict its scope. So the amendments would be made to part 2, and not the other 13 parts of the 2006 Act.
I can assure members of the Committee that the provision is not intended to, and does not, give the Government free rein to rewrite NHS legislation by orderand I am conscious that the words I use can be prayed in aid in any subsequent interpretation. It is intended that the provision would simply allow us to make any consequential amendments to the NHS Act that might be necessary to facilitate the wider roll-out of direct payments following the pilots that are being undertaken. It is not intended to go beyond that, or to create a general power to make any substantial changes beyond making a national provision of direct payments, should that be possible, in a limited number of cases where those limits are constrained by the nature of the condition and the outcome of the evaluations that will take place at the end of the pilots. The provision is reasonably clear and is aimed at enabling us to do what works as a result of the pilots and spread it throughout the country. We do not intend to give the powers wider application.
As the hon. Member for Eddisbury said, the affirmative resolution procedure would be used in relation to this. That provides a significant safeguard and ensures appropriate accountability to Parliament. That said, I hope that the hon. Lady will withdraw the amendment.

Stephen O'Brien: On the basis that it is almost 30 years to the day since I last learned statutory interpretation rulesand given that I believe the Minister is right that what he has said is on the record and can be prayed in aidI am confident that the limitation now rests as written. I am happy not to press the amendment.

Sandra Gidley: There is little more to add and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Stephen O'Brien: I beg to move amendment 17 , in clause 11, page 9, line 42, leave out Secretary of State and insert patient.
As we canter to a close on clause 11, in this amendment to proposed new section 12D we return to where we started at the top of the clause, putting the patient at the heart of the legislation and indeed the care. I can see that the Secretary of State might want to commission information and support services, but will the Minister explain why legislation is necessary to support that? Surely it comes under the normal general duty and remit of the Secretary of State. The question the amendment poses is whether the individual will be able to commission support and information services as part of his or her care plan.

Mike O'Brien: The aim of the power, which would be delegated from the Secretary of State to PCTs, is to allow the NHS to work with other organisations to develop direct payments. A PCT may choose, for example, to commission a voluntary organisation to undertake an assessment and agree a care plan for patients, or it may arrange for a social enterprise to offer support or brokerage services. For example, if a budget is provided to an individual, that person may want to use another organisation either to manage the budget itself or to provide access to particular kinds of care. An example is agency nursing, for which a brokerage may well broker on behalf of a patient.
There are different ways therefore in which we need to have provision for organisations beyond the NHS itself to be able to deal with some of these issues around the budget, but also to make sure the NHSs finances are safeguarded during that process. It enables us therefore to have some degree of budgetary control overall but also to ensure that the way in which these personal budgets are used gives a degree of flexibility to individuals to handle the budgets in the way that they feel best suits their needs and their element of health care.

Stephen O'Brien: I am happy with what has been put on the record. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question proposed, That the clause stand part of the Bill.

Stephen O'Brien: New section 12C(6)(c) states that provision as to the review of a pilot scheme may in particular include such matters as
the effect of direct payments on the behaviour of patients, carers or persons providing services in respect of which direct payments are made.
The word behaviour is the key to the whole section and it is important that we state here that we must re-engage the patient with the whole process of commissioning health care and with the fact that it is a service rightly paid for by the taxpayer. Direct payments should lead to better and more efficient commissioning behaviours and they will also hopefully have beneficial ramifications for lifestyle and wellbeing.

Question put and agreed to.

Clause 11 accordingly ordered to stand part of the Bill.

Clause 12

Jurisdiction of Health Service Commissioner

Question proposed, That the clause stand part of the Bill.

Stephen O'Brien: I have a few questions concerning the health service commissioner. What assessment have the Government made of any increase in work load and how have they resourced that? I discovered during proceedings on the Health and Social Care Act 2008 that although the Government are able to adjust the responsibilities of the ombudsman through legislation such as this, the resource of the ombudsman is not delivered through the money motion of the Bill but must be voted directly by Parliament.
Can the Minister confirm that the ombudsman will not be limited to maladministration in this area? When one talks to the ombudsman, one finds that they do not believe that they are. It is important, however, given that most MPs who deploy the ombudsman on behalf of their constituents tend to think that the ombudsmans remit is limited to maladministration. We must be clear about the expectation here, given that there is no alternative appeals process.
The Under-Secretary of State for Health, the hon. Member for Brentford and Isleworth (Ann Keen), told me earlier this month, in response to a written parliamentary question:
The scope and remit of the parliamentary and health service ombudsman to consider complaints has not been changed by the abolition of the Healthcare Commission.[Official Report, 9 June 2009; Vol. 493, c. 839W.]
Will the patient in receipt of a direct payment be able to complain about anything in the care packagethe commissioning and providing, or overpayment and underpayment, for examplerather than simply the administration of that package?
Thirdly, what is the hierarchy of complaints? Last year saw the removal of the complaints function from the Healthcare Commission, now the Care Quality Commission, which removed peoples ability to push complaints about things other than maladministration beyond their own trust. In the case of direct payments, if the patient is the commissioner, do they lose the right to complain through the PCT? Is their only recourse to complain to themselves, and to the ombudsman? I hope the Minister can give us more clarity about how this will work.

Mike O'Brien: The clause expands the jurisdiction of the Parliamentary and Health Service Ombudsman as set out in the Health Service Commissioners Act 1993. It allows the ombudsman to investigate people providing services funded by direct payments for health care, but who are not health service bodies. In particular, it allows the ombudsman to investigate matters relating to commercial or other contractual transactions arising from arrangements for the provision of direct payment services. So this will not just be about maladministration; it will be somewhat wider than that, so that we can have a proper investigation of problems that arise, which may well result from legitimate disputes that come out of the provision of direct budgets to individuals.
By expanding the ombudsmans scope in this way, we can ensure that people who receive these services have a similar degree of protection to other NHS patients. It is not identicalfor example, the NHS complaints system will not applybut this is consistent with the principle that services procured by direct payments remain NHS services. So where a third party has provided various levels of service, the NHS ombudsman would be able to look at how that third party provided those services. The ombudsman will have discretion about which complaints she wishes to investigate and we expect that she will continue to operate in a sensible and proportionate manner. Neither we nor the ombudsman expect these changes to add significantly to her work load and the ombudsman is supportive of our approach.
We are not aware of any significant resource implications, to deal with the point raised by the hon. Member for Eddisbury, but should that resource implication arise, we will listen to representations from the ombudsman to ensure that these things can be properly looked into in a proportionate and appropriate way. The resource issue is not a major one and we will look at how this develops in the future. As I have indicated, it is not just maladministration and we want to ensure that the health service ombudsman, in particular, will be able to look at matters more broadly than merely disputes between a PCT and someone who has a budgetfor example, to look at how the budget was deployed by the individual. Reports from the ombudsman can help us in the longer term to evaluate how these budgets are being dealt with.

Stephen O'Brien: The last point is important, because it might establish patterns of behaviour as a result of the way things are being done, which, without LINks or, indeed the former community health councils being specifically involved, could be a very valuable way of assessing the collective experience. It will be very important to those who have a concern about the use of the direct paymentspeople in vulnerable situations may be worried about taking a complaint to the very body from which they need continuing support. There is always an anxiety about using a complaints process which is effectively like a parked arbitration process without affecting their relationship with the continuing support that they need. This is a very important area in terms of trust and confidence and why the independence is valued.
The Minister has helpfully identified the expectations, particularly as regards resources, and that confirms what I have heard myself from the ombudsman, but the issue will be whether there is an ability to access the ombudsman, given that ombudsmen have a full panoply of recommendations open to them, but, as we all know, no teeth. The best they can do is issue another letter suggesting that the recommendation has not been carried out, as we know from the Equitable Life debacle. If this is to work properly, in the interests of patients, it is important that the ombudsman be given the full remit. I am satisfied with the reply so far.

Question put and agreed to.

Clause 12 accordingly ordered to stand part of the Bill.

Clause 13 ordered to stand part of the Bill.

Schedule 1

Direct payments: minor and consequential amendments

Stephen O'Brien: I beg to move amendment 140, in schedule 1, page 38, line 32, at end insert
(za) regulations under section 12B.
Amendment 140 would bring all regulations in new section 12B under the affirmative resolution process. These are the regulations we discussed at length concerning the nature of the direct payment pilots. Unless this amendment is made, neither this House nor the upper House will have the chance to debate the substance of the pilots. It is unlikely that we would want to vote down the regulations supporting the pilots by praying against them. It is likely that we would want to see them amended, depending on how the Government act in the debates we are about to have.
On Tuesday the Minister suggested I was presumptuous in moving an amendment directly referring to the NHS board, something the country is crying out for. Here I offer him the chance to make the life of Health Ministers in the next administration, whoever they may be, more difficult in the interests of Parliamentary scrutiny. I will not repeat the debate we had about new section 12B, but I think there are significant concerns about these issues and we should consider asserting an affirmative power regarding them.

Mike O'Brien: We do need to develop regulations to set up the pilots. It is likely that these would have to be amended in light of the review of the pilots if a decision is made to roll out direct payments nationally. We would expect to hold a public consultation on draft regulations for the normal 12-week period. It is our intention to control direct payments with the regulation-making power and that these should be subject to the negative resolution process. I reassure the Committee that it is our intention to use the affirmative resolution procedure for any order either extending direct payments nationally or abolishing the power to grant them. The big issue would come back to the House through the affirmative resolution procedure. If any decision is made to abolish direct payments or to extend them nationally, that would be via the affirmative resolution. As that would be a significant decision for the NHS, we think it is vital that before an order is made it should be approved after a proper discussion in both Houses. We think that many of the rules would be very detailed and although we want to give discretion in the way direct payments are piloted, we do not want to have a level of unnecessary pedantry involved in looking at the detail of what could be mundane rules. Applying the affirmative resolution procedure to all of that would be quite likely to clog up this place for a significant period of time.
With the assurance that any large-scale decision about national roll-out or not proceeding with direct payments would come back under the affirmative resolution procedure, but the detailed regulations would be subjected to a negative resolution procedure after a 12-week consultation with the relevant stakeholders, I hope the hon. Gentleman feels that amendment 140 can be withdrawn.

Stephen O'Brien: I have listened to the Minister and it was semi-reassuring. However, there is an issue of principle here about making sure that Parliament has the opportunity to look at these regulations, particularly as we will want the opportunity, not just in terms of regulations, but to hold the Governments feet to the fire in converting pilots into action. This is an opportunity to state our earnest on this and therefore I would like to press the matter to a vote.

Question put, That the amendment be made.

The Committee divided: Ayes 5, Noes 10.

Question accordingly negatived.

Question proposed, That the schedule be the First schedule to the Bill.

Stephen O'Brien: After the excitement of that vote, I would like to make the point that, in looking at the 20 May memorandum from the Department of Health on health budget pilot programmes and provisional pilot sites, I am pleased to see that the first one on the alphabetical list is the Secretary of States constituency. That will be piloting NHS continuing health care on life care, learning disabilities, mental health and physical disabilities. That will be helpful to give him an insight. I am also pleased to see that Western Cheshire, which covers part of my Eddisbury constituency, is also looking at continuing health care on motor neurone disease, multiple sclerosis, neuro-degenerative conditions and Parkinsons disease as well as end-of-life care. I shall do my best to follow that closely.
I urge the Minister to see whether he can get something in North Warwickshire included, because the more of an insight we have from our own constituents point of view on the way this is working, the more helpful it will be as we try to move pilots into a roll-out.

Mike O'Brien: I am not sure whether I should deliberately seek to land these in my constituency, but I will certainly bear in mind the urgings of the hon. Gentleman. It is important that we look at the way in which these pilots proceed and that we make sure that if we are to have a national roll-out it is in the interests of patients everywhere.

Question put and agreed to.

Schedule 1 accordingly agreed to.

Clause 14

Innovation prizes

Stephen O'Brien: I beg to move amendment 18, in clause 14, page 10, line 37, at end insert
(za) work in any field relevant to the NHS;
(zb) work conducted by any individual, group(s) or organisation(s) employed by the NHS or affiliated to it.

Robert Key: With this we may discuss the following: amendment 136, in clause 14, page 10, line 40, at end insert
(c) work done promoting innovation..
Amendment 137, in clause 14, page 10, line 40, at end insert
(2A) A prize may be paid in instalments relating to subsections (2)(a), (2)(b) and (2)(c) above..

Stephen O'Brien: We now move away from direct payments into innovation, and in particular this one-clause provision in chapter 4 on innovation prizes. I welcome attempts to aid the spread of innovation in the NHS and recognise that this is not only an area in need of improvement but an area with a large amount of potential. Innovation in the NHS, if given the chance to flourish, can motivate and incentivise staff to drive forward improvements to services and it can also furnish British business and industry with opportunities to develop NHS innovations, many of which may have been inspired by the ideas of NHS staff. In that respect, I declare an interest as the parliamentary adviser to the Manufacturing Technologies Association, who manufacture some extraordinarily precise, very small instruments which are used as part of NHS innovations. Through amendments 18, 136 and 137, I want to address gaps in the legislation concerning the scope of the prizes. I will address my queries on the prizes themselves later on.
The amendments seek to ensure that the innovation prizes are open to all NHS employees and to any groups or organisations affiliated to that service. They broaden the scope of prizes to include the promotion of innovation, and enable them to be paid in instalments so that staff can develop a long-term strategy for the uptake of their ideas.
Amendment 18 addresses Lord Darzis clarification on the fourth day of the Lords Grand Committee, that the prizes could be awarded to
people working in the health service but not necessarily employed by it.[Official Report, House of Lords, 5 March 2009; Vol. 708, c. 324.]
He said he was aware of
many people with university appointments who do full clinical work in the health service on honorary contracts.[Official Report, House of Lords, 5 March 2009; Vol. 708, c. 324.]
I can confirm that in a non-remunerative position. I am the vice-chairman at the Liverpool School of Tropical Medicine. I also sit on the board of the Innovative Vector Control Consortium, a research organisation trying to find an alternative molecular structure to DDT. The research going on there will have a direct impact if there is success. The Liverpool School of Tropical Medicine is already having an impact on many things in the health service and there is a fantastic collaboration between it and the university hospitals in Liverpool.
Lord Darzi was right to cite these people as a potential source of innovations, but there is a danger that they could be discriminated against if it is not overtly stated in the Bill that prizes are open not only to NHS employees. The British Medical Association expressed its support when it said that amendment 18 would clarify that medical academics are eligible for the prizes.
I am also concerned that the challenge of an innovation prize decided on by the committee might limit the pool of applicants to a particular field of specialism, and in so doing, discriminate against other NHS staff. By emphasising the breadth of the prize in primary legislation through the amendment, I hope to guard against its application to a specific group of NHS employees or a particular field of expertise. The prizes potential would, therefore, be maximised to inspire everyone in the NHS to innovate. Will the Minister give an assurance that the Committee will not limit the scope of applicants to the prizes by defining too stringently the discipline from which the innovation must originate?
By extending the remit of the prizes to award the promotion of innovation through amendment 137, NHS staff who play a significant role in generating uptake of innovative ideas, and encouraging others to innovate, may be rewarded through the prize. While promotional work will be harder to define, its inclusion in the prize will encourage not only potential innovators, but those with the potential to facilitate the spread of innovation across the organisation. In the next group of amendments, I hope to have the opportunity to discuss the idea that the problem facing the NHS is not so much the dearth of innovative ideas, but their uptake across the service. Promotional activities can greatly aid the spread of innovation, which is why I propose to include them in the scope of innovation prizes. In parenthesis, from my own experience in the manufacturing industry, there is a great concentration on the word innovation, but people readily forget that a lot of that comes through developments of existing technology and building on prior innovations. There is often a great problem in giving the developments the same weight as blue-sky thinking innovations. We need to recognise that often 90 per cent.in most fieldsof what is regarded as innovation is in fact a development of an existing practice or idea.
There is a good example of how promotional activities can be fundamental to the spread of innovation in my own constituency at Leighton hospital near Crewethe Leighton exposition. Since 2004, Mid Cheshire Hospitals NHS Foundation Trust has used its research and development office to set up an effective information dissemination forum to provide opportunities for local clinicians and researchers to network with one another and discuss their practices, ideas and collaborations. The event also showcases the work of local health care research and audit. I attended the last evaluation and am grateful to David Cade and Sasi Willmott, who always produce a brochure with everything set out and documented. There is a prize for the winning entry that is judged by three external, high-powered academic adjudicators. The 60 innovations that were exhibited at the 2008 event bear witness to the fact that innovative ideas are alive and kicking in the NHS. Events such as the Leighton exposition help innovators to promote those ideas among colleagues and, therefore, generate uptake.
The Leighton exposition also demonstrates that it is the clinicians and researchers who are best placed to identify the challenges across the NHS. Innovations at the exposition included identifying reasons for delays in in-patient ultrasound scans, improving access to community services for elderly people after discharge from hospital and an analysis of whether proposals from the National Institute for Health and Clinical Excellence are useful in clinical practice. All these topics originated from staff who identified independently an area of research or a problem in need of a solution. If innovative events such as these are going ahead in trusts such as Mid Cheshire, and if innovators are succeeding in identifying areas of the NHS that are in need of innovation, it questions why the Government are investing in costly prizes that might inadvertently rob innovators of their role. By identifying a challenge for innovators to tackle, the innovation prize committee may be meddling unnecessarily in the innovation process. I hope to seek an assurance from the Minister that the creation of a national prize for innovation will not detract from home-grown, grass-roots initiatives such as the example I have outlined from my constituencyat Leighton hospital, near Crewe.
Amendment 136 would enable the organisers of events such as the Leighton exposition to apply for innovation prizes as the promoters of innovation. I hope the Minister will acknowledge that the promotion of innovation at a local level can be as effective in aiding the spread of innovation as rewarding the innovators themselves. The example of Leighton raises questions over whether innovation prizes will really overcome the obstacles that inhibit innovation in the NHS. The Secretary of State identified the problem with NHS innovation on Second Reading. He said that
the NHS is good at invention, but it can be slow to adopt new technologies and treatments, and the spread of new ideas is variable.[Official Report, 8 June 2009; Vol. 493, c. 542.]
I wholeheartedly agree with the diagnosis of the problem but I question the remedy. Prizes may reward innovation that has already taken placewhich, if I understand it correctly, is the main legislative purpose of the Billbut I fail to see how this change in the rules will encourage the spread of innovation. The problem is surely one of morale. The uptake of innovation is negligent because morale among staff is low. Too often staff have seen their ideas go nowhere, which is disheartening and dispiriting. A recent report by the NHS Confederation called Future of leadership: Leading innovation highlighted the lack of uptake of ideas as a source of low morale among staff. It pointed to the preponderance of risk-averse middle managers in the NHS whose work loads are orientated towards short-term targets, rather than encouraging and championing innovative ideas among their staff. It also emphasised the overly bureaucratic mechanisms through which innovators must pass before they can generate uptake for their innovation. The requirement for the clinician to write a business case was seen as a significant obstacle: it is perceived by staff as a way of saying no to innovation rather than as a vehicle to secure funds and uptake.
Amendment 137 aims to aid staff in generating uptake of ideas by allowing prizes for innovative ideas to be paid in instalments. Each instalment could be dependent on a new stage of implementation, thereby encouraging staff to support an innovative idea and see it through to completion. The problem facing the NHS with regard to innovation runs much deeper than generating ideas. A prize is a great way of rewarding the few innovators who have made it through the gauntlet of securing the support of their colleagues and managers. Only a small number of people can successfully negotiate a heavy target-driven work load to find the time and resources to innovate. However, for the majority of NHS staff, an innovation prize in and of itself will not enable them to overcome these barriers.
I hope the Minister will mention in his response the newly established innovation funds held by the SHAs. He may well say that the prizes are designed to work in conjunction with these funds to spread innovation. I welcome that funding and I hope it will provide much-needed capital for those seeking to develop their innovations. I hope he will also take the opportunity to give an indication of how he intends to change the culture of resistance amongst managers and other NHS staffa culture that, we would argue, is hampered through a somewhat target-centric NHS. This is an issue that runs much deeper than simply the cash that comes with the prize.

Sandra Gidley: I welcome these amendments because they give us a chance to probe where some of this money may be going. Before I progress with my arguments I was a little concerned by the closing remark of the hon. Member for Eddisbury, who talked about a culture of resistance in the health service. My experience of a lot of workers in the health service is

Stephen O'Brien: It was managers.

Sandra Gidley: And managers. My experience is that they are not averse to change, although the hon. Gentleman may have spoken to different people from me. There is a lot of innovation out there, but sadly it is not recognised by many people, including politicians, it would seem.
One of my concerns about the Bill relates to clause 14(1), which states:
The Secretary of State may make payments as prizes to promote innovation in the provision of health services in England,
but says nothing whatever about the NHS. I therefore welcome amendment 18, which makes it clear that the prize may relate to
work in any field relevant to the NHS.
However, it occurred to me that a team employed in the private sector could do work relevant to the NHS and apply for a prize. It would be a concern to many of us if public money could, as a result of the way in which the Bill is drafted, be diverted to the private sector. I hope the Minister can reassure us on that. Where do independent sector treatment centres come into this? What would happen if a team was doing something in such a centre?
I have another concern. When we talk about the NHS, innovation and prizes, we focus almost exclusively on secondary care. If we are serious about moving care towards the primary sector, we need a mechanism to ensure that that happens. For example, optometrists or dentists could have good ideas for prizes or innovation. My concern is that worthy committees full of specialists in secondary care will be set up and will focus automatically on secondary care, biasing what is done. Innovation is not just about the flashy new procedures, and it is not necessarily about the research; sometimes, it is just about thinking outside the box and coming up with a new way of delivering services that is more convenient for patients and the public and which could probably reduce some of the strain on the secondary sector.
When the fine detail is worked out, I very much hope that the prizes will not just be a means of congratulating those who already have quite a number of areas in which to show off their expertise. I hope that they will truly embrace all the NHS.

Mike O'Brien: This has been a helpful debate, and the hon. Member for Romsey has made some thoughtful points, to which I will return in a moment.
The aim of the prizes is to reward breakthroughs in the provision of health services in England, so the provisions relate to the NHS. The challenges will be designed to tackle some of our major health issues and bring about not only radical breakthroughs in the prevention and treatment of lifestyle diseases, but changes in the way in which things are managed and delivered. That includes secondary and primary care.
I strongly take the point from the hon. Member for Eddisbury that innovation could mean the development to a new level of existing ideashe is absolutely right about that. The nature of the process makes it difficult to assess the quality of what is being done and to draw attention to it.
We will have to handle the prizes properly, and to some extent the hon. Member for Romsey is right that there will be a committee of the great and the goodthere always is in such things. We will have to make sure that we have the right distribution of responsibilities on that committee, so that it not only focuses on the obvious issue of developments in secondary care, but includes management and delivery.
I agree with the hon. Member for Eddisbury, although I would not quite put it in the way that he did, that there is a lack of reward and recognition in the NHS system. The prizes are a way to incentivise people and focus minds. They are a way to reward people and to recognise that some people are anxious to make changes.
Unlike the hon. Member for Romsey, I agree with the hon. Gentleman that sometimes in management there is a culture of resistance, inertia or lack of innovation about the way things are done. If we can provide incentives such as this to organisations to be more innovative, to show that we are prepared to put resources behind new ideas that can improve patient care, then we will truly feed into that emphasis on quality that came out of the review by my noble Friend Lord Darzi. That review focuses on ways that we can improve the quality of the NHS and the quality of delivery and recognise that we have passed the stage where we just need to focus on raising minimum standards. This is not just about minimum standards; we have to have a continued focus on that, but we now need to move to a higher level and look at how we improve the quality of what the NHS delivers at the topmake the best better, make the mediocre the best and ensure that we improve quality throughout the NHS.
The scheme is primarily focused at ensuring that people working in the NHS are able to see the benefits and recognition for their work in making a breakthrough. This is not restricted to the NHS; it is available to those working in academia. We want to ensure that there is a regional focus. The £220 million regional innovation fund has been launched and we will target resources at helping front-line staff to develop, grow and spread new ideas, delivering real improvements in the quality of the care people receive. Academic health science centre status has been awarded to five partnerships following the process of peer review by an international panel of experts. Academic health science centres will bring together world-class research, teaching and health care delivery, so that developments in research can be more rapidly translated into improvements in patient care in the NHS and around the world.
We are not restricting the award of prizes to those in the NHS, but we are ensuring that there is a focus on NHS workers knowing that they are available to them, that a challenge is being set and that if the challenge is met internationally or in another sector, a prize may be awarded. That will happen only if the idea is demonstrated to be replicable in the NHS. On amendment 136 we would not expect to award a prize simply for the promotion of innovation in itself. There needs to be an actual breakthrough and it needs to be replicable in the NHS; promotion of a project is one element of that. We need to be able to show that this idea, wonderful breakthrough that it is, can produce a wider benefit, not only in the NHS but, we hope, in some cases beyond that and possibly around the world.
On amendment 137 we are not intending to make payments in instalments. The challenge prizes are not about giving money in the form of grants for work to be undertaken, which the amendment seems to suggest. This is about rewarding work that has been donewe have got an innovation, we award the prize and then that money can be used to replicate or extend the innovation or move it to the next stage. We are going to award prizes for what has been done.
The hon. Member for Eddisbury asked whether this is meddling in innovation. Innovation often happens anyway; this is an encouragement of innovation. In that encouraging innovation and the development of new ideas is meddling, yes it is. It is trying to provide a prize for those who excel and to reward excellence. That is something that we should be doing. We do not want to detract from those in the NHS pursuing innovation; on the contrary, we want to encourage it.
The hon. Member for Romsey in her thoughtful speech asked whether this money would go to the independent sector were it to provide an innovation or breakthrough that helps patients. It will, if it helps patients and if it is replicable throughout the NHS. If we can take the innovation from a private sector organisation and transfer it to the NHS, or if we can find ways in which it will benefit patients in the NHS, it will go to a private sector organisation. It is to reward something from which the NHS will benefit.
I hope that I have dealt with most of the points that were raised by both the hon. Members and that the amendment will be withdrawn.

Stephen O'Brien: I am grateful to the Minister for addressing the matter carefully. As he recognises, we are concerned about this area. There will be significant benefits from getting this right. It has been helpful that he has clarified that the intent that lies behind this, which flows from the Darzi report, is that it is intended to reward breakthrough and reputable innovations or innovations upon developments. It is a post facto reward, so the question will be whether that is a sufficient pull-through incentive and motivator to influence people to shoot for the prize and to make sure that this inculcates more of a culture of innovative activity.
The Ministers last answer was helpful because it is the equivalent of reaching a commercialisable stage in the private sector but absolutely focused on the public sector ethos of the NHS. With that clarity, I can see that the amendments may not wholly fit with that intent. The debate has been helpful, however, and I dare say the Committee of the great and the good, as the Minister described it, may find our exchanges useful in setting their own terms of reference and the expectations that are going to be laid upon them. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Robert Key: It may be helpful to the Committee in the interests of progress if we do not to have a separate debate on clause stand-part because the amendments seem to cover fully the substance of the important clause 14. Although the clause is important, it is very short.

Stephen O'Brien: I beg to move amendment 19, in clause 14, page 11, line 3, at end insert
(4) The committee shall advise on
(a) the selection of candidates for innovation prizes;
(b) the payment awarded to each prize winner..

Robert Key: With this it will be convenient to take amendment 20 in clause 14, page 11, line 3, at end insert
(4) The Secretary of State and his appointed committee may not determine the field, discipline or sector in which candidates for innovation prizes must develop their innovations..

Stephen O'Brien: Thank you, Mr. Key. These amendments cover the rest of the subject, so the absence of a stand part debate is not an issue.
Amendments 19 and 20 lead on from the issues that we have just discussed in the last group. There is a concern that, by allowing the Committee to identify challengesa word that the Minister picked up in his last responsefor innovators to tackle, the Government will be undermining the entire concept of innovation. Amendments 19 and 20 aim to define more precisely the role of the Committee and to ensure that they do not determine the field, discipline or sector from which the innovation must come.
One example is the case raised by Lord Darzi himself as an example of NHS innovationthe introduction of drug eluting stents in angioplasty. This innovation came about directly as a result of the experiences of interventional cardiologists who were involved in angioplasty procedures on a daily basis and familiar with the use of stents and catheters in heart surgery. These clinicians identified a need for the innovation after witnessing first hand the cases of patients who would have benefited from a drug eluting stent in their artery. It was the clinicians as opposed to the authorities who identified the need for an innovation or the challenge that needed solving. If innovation is about finding solutions to the problems we encounter in our everyday experience, why should we have these problems defined for us by the powers that be? Surely the prerogative to innovate and decide where to innovate should lie with the NHS professionals and staff themselves, not with a small committee that will inevitably have a more limited capacity to understand the scope for innovation in every specialism in the NHS.
I hope the Minister will take this opportunity to assure the Committee that the committee that is set up will be wide-ranging enough in its areas of expertise to identify sectors where innovation is required. On the subject of the committees composition, in its brief to me the BMA raised the interesting proposition of placing patients and members of the public on the panel. Not only would this create public interest in NHS innovation, it would also give an incentive to applicants to ensure that their innovations directly impact upon patient care. When I asked the Minister prior to the Bill for an evidence base for the use of innovation prizes, he gave the example of the X Prizea $10 million award for innovation across the globe. The X Prize website states:
Rather than awarding money to honor past achievements or directly funding research, an X Prize incites innovation by tapping into our competitive and entrepreneurial spirits.
If the Minister is using this prize as his model for NHS innovation, I have to ask why he is proposing to award prizes retrospectively for research and other innovations. I hope that he has some evidence base for awarding prizes retrospectively, a point which was confirmed in the previous group of amendments.
I also question the need for legislation when the impact assessment states that the Secretary of States existing powers already allow him to backfill the costs of research. It also states that the first round of prizes will be launched in 2009, while the legislation itself will not come into play until 2010. I assume, therefore, that the Bill is not actually the source of the power that the Secretary of State needs in order to get this going.

Sandra Gidley: I note your desire not to have a clause stand part debate, Mr Key, so I shall try to incorporate my extra comments into the points I am about to make. Amendment 19 mentions what the Committee shall advise on. We have some very vague criteria. It would be helpful if those criteria were pinned down a little more. One thing that concerned me was the setting up of yet another committee.

Mike O'Brien: I am sorry, I didnt catch the point that the hon. Lady was making. Someone coughed and I did not hear it.

Sandra Gidley: We are setting up yet another committee, but presumably an existing committee could advise on these prizes. Clause 14(3) says:
The Secretary of State may establish a committee...and may pay remuneration.
This also worried me slightly. It is fair enough to remunerate someone from an outside body, but I suspect that most people on this committee already work for the NHS in some capacity. I seek some reassurance that they will not receive extra payments for their work on this committee when, presumably, their time on the committee will be at the expense of their other work.
It would also be helpful if the Minister could clarify whether these payments are going to go to individuals, heading teams or other teams, or whether they will go to the trust that will be implementing the work. I am not entirely clear who will benefit from these prizes. I am comfortable with the concept of prizes, because it is always nice for the work of staff to be recognised, it gives people an impetus and a feel-good factor and NHS workers need some of that, but I am not entirely clear who will benefit from these payments.
Amendment 20 seems to want to ensure that the Secretary of State or the committee do not
determine the field, discipline or sector in which candidates for innovation prizes must develop their innovations.
I understand the thought behind this, but bearing in mind my earlier comments, there is another way to look at this problem. I raised concerns earlier that primary care may not receive its share of the prizes. Concerns were raised on Second Reading , including by the hon. Member for Eddisbury, that the right sort of research may not necessarily feature highly. Is there a case for ensuring that at least some of the money is allocated to each of these sectors? One would not wish to be too prescriptive, but this would help the committee to concentrate its thinking on ensuring a breadth of awards across primary and secondary care and embracing what is regarded as the more pure research arena. It would be helpful to know whether there is any thinking on that.
My final comment is, again, about money. Things will get very tight, so will this be a new pot of money, or will resources be diverted from an existing awards scheme?

Mike O'Brien: I am grateful to hon. Members for the way in which they have dealt with the issue. Let me deal with some of the questions that have been raised.
The idea is that the prize should be paid retrospectively. However, it could be paid after a successful outcome in a challenge that was set upfront. The committee of experts could receive applications from individuals or organisations that wished to pursue a particular idea. Those individuals or organisations would then, in effect, be approved for that challenge, but they would get the funding only if their work successfully delivered.
Research conducted as part of the NHS next stage review demonstrated that challenge prizes in other sectors have led to investments of up to 10 to 16 times the cash value of a prize in relevant research to meet the objectives. In a sense, therefore, there is a kudos to the prizethere is a recognition that organisations, groups, teams and individuals strive for. The prize gets excellence out of those who might otherwise feel that they would not be recognised if they work really hard. We want the team of experts to stimulate innovation and excellence and to ensure that we have the best delivery.
We want a broadly based expert panel that includes leading medical scientists, hospital staff, managers, academics and others and which will look broadly at the way in which the NHS operates. As the hon. Member for Romsey said, a number of committees already exist. Indeed, there are several important awards recognising innovation and outstanding performance by health care practitioners and organisations, such as the health and social care awards awarded by the NHS Institute for Innovation and Improvement. However, we want to go beyond the performance achievement recognised by current prizes and to award cash prizes that are linked to predefined challenges and which will have a significant impact on the populations future health.
Professor Sir John Bell, the president of the Academy of Medical Sciences, has been appointed as the expert panels interim chairman, and there will be a call via the NHS Appointments Commission, for expressions of interest in membership of the panel. That is the way in which we intend to go about this.
Whether payments will be made to individuals or teams depends on the nature of the challenge that has been set. A challenge may be set for an individual or a team. The challenge may for a PCT to develop a new way of delivering health care. There will therefore be a degree of flexibility in terms of the response to the challenge. The committee of experts will be given the flexibility to determine that.
Will particular sectors be identified? Yes, groups or individuals will be able to write in to say, We wish our research to be considered for a challenge prize. The committee of experts will then examine the application together with others and take a view, on the basis of the resources available to it, as to which could really benefit the NHS and be replicated throughout it.
The hon. Member for Romsey hinted that there are all sorts of innovations and new ideas, but it will not be possible easily to replicate some of them. They might be good for the private sector, but not the public sector, and they might have just a limited, narrow objective that will not have large-scale applicability. The committee will therefore need to examine whether something will benefit the NHS as a wholethat is the objective. It will have the criteria, and it may say, This is such an important area that we need to award a challenge prize, even though only a very small number of patients will benefit from a breakthrough in this narrow area. However, the aim is that the NHS would be able to benefit more broadly from an innovation.
The panel of experts has a fair degree of flexibility in its response. We hope that it will be able to frame a challenge and incentivise a solution in such a way that efforts and funds are multiplied by teams striving to compete and win a prize. The innovation challenge prizes purpose is to focus minds by putting significant challenges into the system. They are a first for the NHS and we continue to work with a range of stakeholders to make sure we get this right. Once the panel has been appointed, these conversations would really have a starting point. Challenges could be laid down to innovators from across the country to tackle issues such as childhood obesity, Alzheimers, dementia, addiction, or chronic obstructive pulmonary disease. The prizes would reward only those ideas that could be replicated and diffused quickly across the NHS, accelerating the time it takes for ideas to move from, in effect, the bench to the bedside. We want to move excellence forward as quickly as possible. I hope with those reassurances the amendment will be withdrawn.

Stephen O'Brien: I think that the Minister has done extraordinarily well to get as far as this point in our proceedings before coming out with the first big soundbite: from the bench to the bedside.
We have had a helpful debate. Lying behind this innovation and prize process is clearly a model of being focused against an identified challenge. This is an inelegant analogy but, within the NHS, we have an equivalent to the Manhattan Project. On the prize, I can see that the Minister hopes that the leverage through the kudos will excite people to apply the research capacity to come up with a successful solution. It will be important that we retain the idea of this committee or panel of expertsalthough in recent days, the news coming out of Iran about the Council of Experts has been very unhelpful, not least as it involves the only thing that can put any constraints on the Supreme Leader. That said, the nub of this will be how the panel calls for ideas for challenges, from which it will, after a sifting process, come up with what will be put out there.
For what it is worth, arising from my work on malaria, I draw the Ministers attention to the fact that there is already a model that might be effective for the new committee: the Medicines for Malaria Venture, which is based in Geneva and partly funded by Bill and Melinda Gates. It works well by taking ideas from various sources that might be able to come up with innovative solutions to combat malaria. It has done a tremendous job and, through the sift, has identified where the effort needs to be made. That model is probably worth looking at.
Following a discussion that is useful to have on record, especially as the committee sets about its work, I am happy to beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Question put forthwith (Standing Orders Nos. 68 and 89), That the clause stand part of the Bill.

Question agreed to.

Clause 14accordingly ordered to stand part of the Bill.

Clause 15

Trust special administrators: NHS trusts and NHS foundation trusts

Michael Penning: I beg to move amendment 177, in clause 15, page 11, line 36, after it, insert necessary and.
It is a pleasure to be dealing with this part of the Bill under your directorship, Mr. Key. You must have done a fair bit of homework in the last 24 hours to be assisting us on the Bill.
This important part of the Bill deals with trust special administrators. The whole area of failure within the NHS is something that needs as much transparency as possible. The good news is that I will not move all the amendments on the amendment paper, not least because I want to listen to what the Minister has to say. Perhaps we can come back to some important areas on Report.
Amendment 177 is important because at the moment the Bill says that the Secretary of State should appoint a trust special administrator only if they consider it
appropriate in the interests of the health service.
The amendment would insert the word necessary so that it would be not only appropriate for the whole NHS for the Secretary of State to approve such a measure, but necessary.
Those of us with experience of local trusts bringing in turnaround teams and so on have concerns about who these administrators will be. It seems that there is an assumption under the Bill that the administrators will mainly cover fiscal problems within foundation trusts, but that might not be the case. Will the Minister not only address whether he is happy for the word necessary to be inserted, which I think would improve the Bill, but give an indication as to who these administrators might be, where they might come from, and the cost implications of their appointment?

Sandra Gidley: I wonder whether the amendment would restrict inspectors too much. If we think of recent examples, it took quite a time in some cases for a body of evidence to become available indicating that there were problems. By inserting the word necessary, presumably there would have to be some sort of test, but I wonder whether that would restrict the possibility of proper investigations taking place. I am also keen to hear what the Minister says.

Mike O'Brien: By using the word necessary as well as appropriate, as the amendment proposes, a higher standard would be imposed on the Secretary of State when appointing a trust special administrator. I agree with the hon. Lady that that would restrict the ability of the Secretary of State to deal with problems that could arise. These problems could relate to finances, but they could be much broader than that, as we have seen in recent cases. Perhaps this is not the place to discuss those, but I think that we are all aware that there needs to be an appropriate ability to deal with problems that arise in not only finance, but the provision of health care.
If we inserted the word necessary and it were argued that other options should be canvassed, the Secretary of State would not be able to take the appropriate action that was needed. The appointment of a special administrator could not be said to be necessary if there was any other option. This would apply even if appointing a trust special administrator might be the best outcome. We do not want to be prevented from using a regime when it is most needed and could be the best possible outcome. For that reason, I cannot accept the amendment.
We envisage that the Secretary of State would use the power rarely. Interventions will be made through the new NHS performance framework or Monitors compliance framework. In the very rare cases when these interventions are unsuccessful, or the strategic health authority is not able to get plans agreed on how to address the situation, it would be appropriate to appoint a trust special administrator. The trust special administrator would need to be an individual or a body with the skills and knowledge to work collaboratively with staff, patients and local and national bodies. They would require significant experience of the NHS and would not be in any way described as not appropriate to carry out the role assigned to them.
A degree of flexibility would be necessary when establishing exactly who a special administrator would be. It would depend on whether the key issue was primarily finance, in which case a special administrator would need to have considerable experience in that area, or the management of health care, in which case the expertise would need to be in management. Those are primarily the key issues. However, the requirement that the special administrator should have a clear understanding of the way that the NHS works is enormously important.

John Pugh: I have some sympathy with the amendment. While the Minister was speaking, I was thinking of scenarios in which, for example, the Secretary of State might judge that decisions are not being made for the best configuration of health services. For instance, there might be a need to close down a maternity wing because it is not sufficiently subscribed to by local mums. The hospital might decide to preserve the maternity wing in response to local opinion, but the Secretary of State could take a harder line, and he would obviously be free politically to do so. While the Secretary of State might deem it appropriate to intervene in such a scenario, I get the sense that the general intention of the measure is to deal only with conditions of chronic failure, not to override local autonomy. It might be helpful if the Minister put that on record.

Mike O'Brien: I can certainly confirm that the measure is intended to be used only where there is a chronic failurea serious collapse in administration, health care or the finances of an organisation. It is not intended to deal with the types of disagreements that happen on a not irregular basis because we have local autonomy. There will be disagreements within organisations, between different groups and between the view of the Government and the view of a local PCT, but it is not intended that the measure will be used in such cases. It is designed to deal with very serious situations. I hesitate to use the word crisis, but it would certainly be used in a situation that was bordering on a crisis when there was a serious or even chronic failure that required intervention that was proportionate but substantial.

John Horam: To what extent do the arrangements give the Minister powers that he does not already have? For example, he might be aware that, in my constituency, the Bromley Hospitals NHS Trust had accumulated debt of £100 million as well as an operating debt. As a consequence, there was a turnaround directive and an independent accountant examined the figures from the previous four or five years to find out how the trust had got into that position. The non-executives were sacked and the whole situation was turned around. Frankly, the process was not wholly satisfactory, but we reached a new situation as a result of Ministers existing powers. That purely financial situation is being dealt with satisfactorily, so why does the Minister need these further powers, given that he already has substantial powers in his existing remit?

Mike O'Brien: As far as the areas of intervention are concerned, to some extent this depends on whether a foundation trust is involved. If that is not the case, it is possible for the PCT to carry out the sort of intervention that has been described to ensure that appropriate people are in place to deliver a local health service in an organisation. If the PCT itself is at fault, the SHA might well have the ability to intervene. However, when we get to foundation trusts, the situation is somewhat different. In that situation, Monitor and its compliance framework are the key criteria, because foundation trusts are much more independent and they have a greater degree of autonomy. An intervention in that situation would be much more restricted, so Monitor would be required to intervene and would have responsibility for taking the appropriate action.
A question then arises of whether, if that action fails, foundation trust status should be withdrawn. Monitor would have to take a view on that. If foundation trust status was withdrawn, the foundation trust would move into the category of being a trust, which could be intervened on by the Secretary of State or the person appointed by the Secretary of State as a special trust administrator. That is the straightforward process. Yes, there are existing powers, but the clause gives the Secretary of State additional ability to intervene and to appoint special trust administrators.

Michael Penning: I thank the Minister. There are other aspects of how the special administrators will operate. He might wish to intervene on me, because he did not indicate where the cost burden of the special administrators will fall. Certainly when turnaround teams went into the constituency of my hon. Friend the Member for Orpington and mine, the cost burden was taken up by the trust, although the contract for the turnaround team had been agreed by the Department of Health and the SHA. If the Minister cannot reply now, perhaps he will write to me. I listened carefully to his comments, and I think he has taken on board what hon. Members said. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Michael Penning: I beg to move amendment 178, in clause 15, page 12, line 10, at end insert
( ) the staff of the Trust..

Robert Key: With this it will be convenient to discuss the following: amendment 179, in clause 15, page 13, line 5, at end insert
( ) the staff of the Trust..
Amendment 180, in clause 15, page 13, line 5, at end insert
( ) the trustees,
( ) the board of governors..
Amendment 181, in clause 17, page 18, line 5, at end insert
( ) the staff of the Trust..

Michael Penning: This group of amendments addresses the fact that there is no requirement in the Bill for staff to be consulted before special administrators are appointed. The Governments impact assessment says that it should be a priority to ensure that staff are engaged in the process. Retaining staff and maintaining morale within an organisation is crucial, but nothing in the Bill indicates that such consultation would be required before a trust special administrator was appointed. That is the reason behind these four amendments, and I hope that the Minister will explain why such a requirement is missing from the Bill.

Mike O'Brien: The hon. Gentleman makes a good point. I entirely agree that staff engagement is a central principle of such a regime. When such intervention is triggered, it will understandably be unsettling for staff, so we designed the process to produce a swift resolution while ensuring that staff are engaged throughout. In Grand Committee in the other place, my noble Friend Lord Darzi of Denham said that staff should be engaged throughout the process, and that staff engagement would be further strengthened by statutory guidance, which we will produce. With that assurance, I hope that the hon. Gentleman will withdraw his amendment.

Michael Penning: The assurance on the statutory guidance addresses the point that it is important that staff have confidence in the system, so I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Michael Penning: I beg to move amendment 93, in clause 15, page 13, line 43, at beginning, insert Immediately.

Robert Key: With this it will be convenient to discuss the following: amendment 95, in clause 15, page 15, line 24, at beginning insert Immediately.
Amendment 96, in clause 17, page 19, line 7, at beginning, insert Immediately.
Amendment 97, in clause 17, page 20, line 18, at beginning insert Immediately.

Michael Penning: I decided not to move amendments 182 and 101 to give me a bit of extra time[Interruption.] Just joking.
This important group of amendments addresses the fact that the Secretary of State is ultimately responsible to Parliament, and would require the Secretary of State to place before Parliament the report on the failing trust as soon as it was available. The report could be presented to Parliament or to a scrutiny Committee, such as the Health Committee.
When there are problems in the NHS, transparency is vital. I am sure that you agree, Mr. Key, that it would not be right and proper for the Secretary of State to have on his desk a trust special administrators report on how bad a situation was when Members of Parliament for the constituencies involved and, more importantly, the public and local involvement networks did not have a copy of the report. The amendments would require the Secretary of State to place the report on a failing trust before the House.

Mike O'Brien: In practice, we anticipate that the draft report will be published and sent to the Secretary of State by the trust special administrator simultaneously. The Secretary of State will then lay it in Parliament as soon as is reasonably practicable. The amendment would therefore be problematic if, for example, the House was not sitting. There are procedures, but they take some time. However, there would be no reason in such circumstances for the Secretary of State to delay laying the report before Parliament, because it will have been published.
The TSA would need a good reason to send a draft report prior to publication to the Secretary of State. For example, they might have to intervene in a particular way if the Secretary of State needs to be informed about something that need to be dealt with that could involve confidential patient information. It might be possible to produce a draft report, but the aim is for the trust administrator to publish a broad report and for the Secretary of State to make it available to Parliament at the earliest appropriate opportunity.

Michael Penning: I listened carefully to the Minister, and he has now placed on record that the report will be published simultaneously. I still have concerns about why a draft report will not be available and under what circumstances the Secretary of State would hold it back from public and parliamentary scrutiny. I said at the outset, however, that because I would not move some amendments and I was going to listen to the Secretary of State, I might return to some of my remaining concerns at a later stage of the Bill. I emphasise again that there is an absolute necessity for as much transparency as possible, and that there is also a need for a regime. As yet, we still do not know how much the special administrator will cost, but on the basis of the Ministers comments and reassurance, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 15 ordered to stand part of the Bill.

Clause 16 ordered to stand part of the Bill.

Schedule 2 agreed to.

Clause 17

Trust special administrators: Primary Care Trusts

Question proposed, That the clause stand part of the Bill.

Andrew Turner: I should like to ask the Minister to be clear about clause 17, because there are no trustsonly primary care trustson the Isle of Wight. Will he explain the position?

Mike O'Brien: I will write to the hon. Gentleman about the problems and issues in relation to the Isle of Wight. I hope that he will be satisfied with that.

Question put and agreed to.

Clause 17 accordingly ordered to stand part of the Bill.

Clause 18 ordered to stand part of the Bill.

Clause 19

NHS and other health appointments: suspension

Stephen O'Brien: I beg to move amendment 21, in clause 19, page 23, line 15, at end insert
(1) The Secretary of State may issue guidance on the suspension of NHS and other health appointments. These may include
(a) details of appeals processes for suspended appointees; and
(b) details of parliamentary accountability..
Let me rein in the horse a little. We turn to suspension, but not the suspension of ones breath. The clause gives effect to schedule 3, which amends various enactments to provide for the suspension of non-executive board members. To make it absolutely clear what we are discussing, the Government already have the power to suspend NHS trust and PCT non-executives. The clause will extend the power to strategic health authority non-executives and those of other NHS bodies. Paragraph 1 of the evidence base mentions social care, and I hope that the Minister can tell me to which non-executive position that applies.
It seems right that the power to suspend should be available as a halfway house between keeping someone in post and firing them too hastily. Equally, it must not be abused as a way of threatening a good person whom the Department does not like or preserving unduly someone who ought to be sacked. Given the almost pre-Runnymede powers the Bill looks to bestow on the Secretary of State, amendment 19 would hold the right hon. Gentleman more accountable for such decisions than the current legislation allows.
The first safeguard is that the suspended person be given details of appeal, while the second safeguard would be that the Government bring some parliamentary scrutiny into the process. Obviously, I worry about their motives in that particular regard. As the explanatory notes make clear, such action arises from events at the Maidstone and Tunbridge Wells NHS Trust. In its summary, the regulatory impact assessment said that the first key non-monetised benefit is maintaining public confidence. The table at paragraph 12 states that the public perception that nothing was being done could be damaging to the organisation and that the first considered monetised cost is public perceptionsomewhat tellingly, media handling. I put it to the Committee that the Government are not legislating to save the blushes of hospitals, but to help manage the process of public perception and image for themselves.
As the explanatory notes state at paragraph 35, the power to suspend will rightly be devolved to the Appointments Commission. Will the Minister clarify how the suspension process will, as a matter of practice, work? Will suspension be on full pay? We must remember that the Appointments Commission does not yet seem to have succeeded in getting appointments without political bias. Last year, 8 per cent. of applicants were affiliated to the Labour party, as were 10 per cent. of appointees, whereas 4 per cent. of applicants affiliated to the Conservative party resulted in only 2 per cent. of appointments. We had the whole rather damning issue about the resignation of the former Minister of Health from her post at the Department of Health over the appointment of Sir David Henshaw. It would be somewhat pejorative of me to read into the record the full quote of what she said, as I dare say all members of the Committee remember it well.
According to the submission to the Delegated Powers and Regulatory Reform Committee, the powers fulfilalthough that might be too strong a worda commitment in developing the NHS performance regime. The document was a result of something of a struggle between David Nicholson and Anna Walker. Baroness Young has now taken on the responsibility as chairman of the Care Quality Commission, whether it is the Department or, as it should be, the independent regulator who has the responsibility for performance management. I hope that the Minister will explain what role the CQC will have in the suspension process.

Mike O'Brien: As for suspension, we would have to be in a position when there was an issue of considerable importance. The Secretary of State would then delegate his powers of public appointment to the Appointments Commission, an independent organisation accountable to the Secretary of State. To ensure that the relevant bodies are ready for implementation of the powers, the Appointments Commissions draft guidance was included in the consultation exercise when introducing new powers of suspension, which ran from July to October last year. An updated version was published with the Governments response in January this year.
The guidance set out how the Appointments Commission will manage resignations, termination of appointments and suspensions of non-executives lawfully and in the best interests of the public, and respecting the rights of the office holders. I was asked whether suspension would be on full remuneration, and the answer is yes. I was also asked about the process for suspending senior appointments. The Secretary of State will delegate his power to the Appointments Commission. Cases would usually be referred to the commission by the person to whom the appointee is accountable for their duty in bringing evidence to its attention. In the referrers opinion when it does not lead to the suspension of the appointee from office, the commissions role will be to work with the referrer as necessary to establish whether there is a case for suspension. In the case of a vice-chair or other member, the referrer would usually be the chair of the organisation. In the case of the chairperson, the commission would have to take a view. We would expect any body with which the commission is not involved to follow good practice.
Essentially, the process of dealing with such suspensions has been published. We want to ensure that the Appointments Commission is operating within the procedures it has set down publicly. When difficulty arises, a key requirement is that public confidence in the NHS must be maintained. That confidence must always remain one of the key priorities for those who run the NHS in ensuring that such issues are dealt with. In the end, it is the taxpayer who funds the NHS and to whom the NHS is ultimately responsible as taxpayers and patients.
The CQCs role will depend on whether there is a need for a quality examination of the way in which the organisation involved operates. If the issue is financial, the CQCs involvement will be limited. If it relates to patient care, as in a recent case, the role of the CQC or its equivalent will be important.
I will write to the hon. Gentleman about which organisations relate to social care.

Stephen O'Brien: I am grateful for those reassurances and I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 19 ordered to stand part of the Bill.

Schedule 3

NHS and other health appointments: suspension

Stephen O'Brien: I beg to move amendment 22, in schedule 3, page 42, line 13, after Ministers, insert after consultation.
This galloping through can be quite catching, Mr. Key. However, I am afraid that a number of amendments have been tabled to schedule 3. We will try to rattle through them, but from page 42 of the Bill, there is a lot of detail that must be looked at carefully.
The amendments on this schedule relate to the terms of office of members. We want to explore aspects of the new suspension powers and how they will bite on various bodies. What consultation does the Minister plan to undertake before making these regulations? Why will this power be created through regulations in relation to this Bill and not the other Acts that are listed in the schedule? Will the Minister confirm which bodies the power applies to, other than the Commission on Human Medicines?

Mike O'Brien: The amendment would place a duty on the Minister to undertake consultation prior to any ancillary provisions being made by regulations relating to the Commission on Human Medicines, committees or expert advisory groups. The provision extends beyond the commission to various committees and expert advisory groups. The Secretary of State will work jointly with the Minister for Health, Social Services and Public Safety in the Northern Ireland Executive to enact any regulations. It is important that they have the flexibility to react swiftly to changing circumstances. Consultation on the technical detail of this essentially administrative process would take time and could delay essential appointments.
Formal consultation on the proposed suspension powers and processes has already been undertaken. The devolved Administrations and the non-executive communities support the proposals. I hope that the hon. Gentleman will withdraw the amendment because the consultation on the processes has already taken place and has secured support.

Stephen O'Brien: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Stephen O'Brien: I beg to move amendment 23, in schedule 3, page 43, line 9, at end insert
(9) The Secretary of State may by regulations make provision for compensation if the suspension is revoked under sub-paragraph 8(a)..

Robert Key: With this it will be convenient to discuss amendment 24, in schedule 3, page 44, line 42, at end insert
(9) The Secretary of State may by regulations make provision for compensation if the suspension is revoked under sub-paragraph 7(a)..

Stephen O'Brien: Amendment 23 would make provision for compensation if a suspension from the Alcohol Education and Research Council is revoked by the Secretary of State, and amendment 24 would make a similar provision in relation to the Human Fertilisation and Embryology Authority.
The amendments would prevent the Secretary of State from wielding his power lightly. An improper suspension could not only bring unnecessary heartache to a hard-working non-executives and those around them, but it could be detrimental to the boards that they serve. I reserve a particular concern about the HFEA. Given the failure of the Government to give a free vote on that legislation last year, I am concerned that the Secretary of State is able to hang the threat of suspension over non-executive members of the authority with whom he might disagree. Obviously, in the rare case that the suspension is justified but revoked, no compensation would be a suitable option, hence leaving the Secretary of State free to make regulations.

Mike O'Brien: A decision to suspend an individual is intended to be a neutral act taken to further an investigation and does not indicate grounds for permanently removing an appointee from office. That would be determined through a formal termination process, so evidence would have to be sought, an investigation undertaken and a decision made.
Allowing compensation payments to be made in such circumstances would be inconsistent with the sentiment of the proposed suspension policy. The policy is already accepted within the NHS and indeed, such a provision would probably have implications for wider employment law. When someone has been suspended on full remuneration, it does not indicate guilt or produce a requirement for compensation to be paid.
Suspended appointees of the HFEA would continue to receive any remuneration to which they are entitled throughout the period of suspension, but members of the AERC are not currently remunerated. The Secretary of State would have to take action in an appropriate, formal investigatory way and reach an appropriate determination in any investigation. There are protections within the process that enable any abuse by a Secretary of State or anyone else to be dealt with appropriately.

Stephen O'Brien: The Minister is of course completely right that a suspension is intended, and must be seen, to be a neutral act, and it must always be presumed that someone will be retained and confirmed in their position as much as it is presumed that they might lose their position as a result of a period of suspension in which they have had an opportunity to answer questions that might be put to them. Indeed, they might find that there is no question to answer. Therefore, with those assurances, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Stephen O'Brien: I beg to move amendment 183, in schedule 3, page 44, line 42, at end insert
(9) Where a person is suspended under paragraph 5A, in relation to a condition under paragraph 5(5)(c), the Secretary of State shall make a statement to Parliament..

Robert Key: With this it will be convenient to discuss amendment 30 , in schedule 3, page 47, line 35, at end insert
(3) Where a person is suspended under paragraph 2(2)(c), the Secretary of State shall make a statement to Parliament..

Stephen O'Brien: Amendment 183 would introduce further safeguards against the Secretary of States power and bring the matter within the ambit of parliamentary scrutiny. The Bill gives the Secretary of State the power to suspend a non-executive using the same grounds on which the power to terminate employment rests. Those grounds, which are outlined in paragraph 5 of schedule 1 to the Human Fertilisation and Embryology Act 1990, are that a person
(a) has been absent from meetings of the Authority for six consecutive months or longer without the permission of the Authority, or...(b) has become bankrupt or made an arrangement with his creditors, or, in Scotland, has had his estate sequestrated or has granted a trust deed for or entered into an arrangement with his creditors, or...(c) is unable or unfit to discharge the functions of a member.
Paragraphs (a) and (b) are obviously discrete categories, but paragraph (c) is more subjective. It therefore seems fitting that suspension on the ground of paragraph (c) should be put before Parliament.
Amendment 30 refers to the suspension of monitors and non-executives in the same terms. Under paragraph 2(2)(b) of schedule 8 to the NHS Act 2006, the Secretary of State can fire a person on the grounds of incapacity or misbehaviour. If an individual is fired, the Secretary of State would have to consider whether those grounds would stand up in court. Suspension is much less likely to end up in the courts, so the amendment seeks to mitigate the breadth of the power by giving Parliament a role. The question is how it would have such a role. That could be a matter under the ambit of a form such as the Select Committee.

Mike O'Brien: I have some concerns about the amendment. There may be personal circumstances, perhaps ill health or other issues, that we should have cognisance of when making decisions about whether statements should be made to Parliament. Details would be in the public domain under all circumstances where a public employee of a body accountable to the Secretary of State is suspended; the awareness of that suspension would become public. It is not necessary for a separate statement to be made to Parliament when a public employee is suspended from monitor or the HFEA. However, we need to consider matters case by case to identify the most appropriate way of passing on information that ought to be communicated to Parliament. It is not usual for statements to be made under these circumstances. It is difficult to know, if personal issues were involved, whether the Minister would be able to detail those. In some cases it might be appropriate to do that, in others it may not. Given the variability of cases and the circumstances that apply, we should not be too prescriptive about the way in which matters should be dealt with. To some extentand much as it may go against the grainthis is an area where there must be an element of trust that the Ministers and Secretary of State will make appropriate decisions about how much a particular individuals circumstances can be put into the public domain. With those reassurances that we intend Parliament to be as informed as it should appropriately be, I hope the hon. Gentleman will withdraw his amendment.

Stephen O'Brien: I am grateful. I acknowledge that the Minister recognises that this is tricky territory that carries with it the potential sensitivities of human circumstances. He talked about that in terms of illness, but it also interrelatesif there is a parliamentary opportunitywith operation of the sub judice rule. That may or may not be invoked at that point, depending on whether there is something before the courts, or indicated to be.
To some degree, the thinking that lay behind the amendment came from frustration about the accountability and timing that arose as a result of wanting to discuss what happened at Maidstone and Tunbridge Wellsparticularly in relation to the former chief executive Rose Gibb. That became a subject that was impossible to question, given there were such deep anxieties, not least for the patients and their families who were in the catchment area for that hospitals trust. The thinking was to try to find a way of making sure there was an opportunity to air some of the issues, despite suspension and the operation of the sub judice rule under Erskine May, and such things. It has been useful to air the amendment, but I do not wish to press it. I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Stephen O'Brien: I beg to move amendment 27, in schedule 3, page 47, leave out lines 14 to 16 and insert
the Commission must have regard to the Secretary of States advice regarding the appointment of the vice-chairman.

Robert Key: With this it will be convenient to discuss amendment 26 , in schedule 3, page 47, line 19, at end insert
(c) make provision about the appointment of new non-executives, and of one as vice-chairman in the event that all non-executives are suspended..

Stephen O'Brien: Briefly, amendment 27 breaks the convention that the legislation carries the Secretary of State as the actor, but, as has been confirmed, action is devolved to the appointments commission. This part of the schedule addresses the Appointments Commission itself. Given the power the appointment has, and the Governments tendency to meddle in appointmentsas we have arguedit is even more essential that the Secretary of State is kept on a tight leash. I hope the Minister can tell the Committee how the Appointments Commission appoints its own non-executives and the Secretary of States role in that.
Amendment 26 is merely a probing amendment to find out what happens in the, admittedly, unlikely but not implausible event that all the non-executives are suspended.

Mike O'Brien: Suspending the chairman of a board or the entire non-executive team is a drastic action. In such circumstances, it is essential that the Secretary of State can provide for someone to lead the commission during such a challenging period. Schedule 4 to the Health Act 2006 already allows the Secretary of State to appoint non-executives to the commission, so amendment 26 is not necessary.
If the chair alone were suspended, the full expectation is that the vice-chair appointed by the commissions board would, in most cases, be well placed to remain as vice-chair. Where that is not the case, it would not be appropriate for the commission to elect its own vice-chair, even with the benefit of the Secretary of States advice.
Although the commission is an impartial organisation, it must remain accountable to the Secretary of State, who is accountable to Parliament. That requires that the Secretary of State has the power to make provision for appointing the leadership of commissions board.
That is the way in which we would seek to proceed. With those reassurances, I hope that the hon. Gentleman will withdraw the amendment.

Stephen O'Brien: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Stephen O'Brien: I beg to move amendment 28, in schedule 3, page 47, line 22, leave out for paragraph 9(d) substitute and insert
at end of paragraph 9(d) insert.

Robert Key: With this it will be convenient to discuss amendment 29, in schedule 3, page 47, line 26, leave out for paragraph 5(d) substitute and insert
at end of paragraph 5(d) insert.

Stephen O'Brien: Amendment 28 refers to the provision in schedule 3, paragraph 10, to replace paragraph 9(d) of schedule 2 to the National Health Service Act 2006, which makes provision for regulations regarding
the circumstances in which a member of a Strategic Health Authority who is (or must be regarded as) an officer of the Strategic Health Authority may be suspended from performing his functions as a member.
Similarly, amendment 29 refers to the provision in schedule 3, paragraph 11, to replace paragraph 5(d) of schedule 6 to the Act, which makes provision for regulations regarding similar points.
I hope that the Minister can explain why those changes have been made. Given that the Act is from 2006, it is strange that the Government did not get it right the first time.

Mike O'Brien: This is a great Government, but we are not infallible. We live and learn[Interruption.] We will live for quite a while longer. One never knows.
The Bill replaces paragraphs 9(d) of schedule 2 and 5(d) of schedule 6 to the 2006 Act, both of which refer only to officer members of strategic health authorities or special health authorities. The replacement paragraphs include chairs, vice-chairs and other members.
The amendments would serve only to duplicate the regulation-making provisions for members. With that clarification, I hope that the hon. Gentleman will not press his amendments.

Stephen O'Brien: On the basis that the Minister has said that the Government are not infallible and that he has tried to put a human face on them, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Stephen O'Brien: I beg to move amendment 143, in schedule 3, page 47, line 35, at end insert
(d) In assessing whether there are or may be grounds to remove him from office under paragraph (b) the Secretary of State may consult
(i) the Care Quality Commission;
(ii) Strategic Health Authorities; and
(iii) the Audit Commission.
The amendment would balance the Secretary of States powers regarding Monitors non-executives. Given the Governments swings on foundation trusts, we need to ensure that we understand the issues carefully, as my hon. Friend the Member for Hemel Hempstead has highlighted elsewhere.
The amendment would allow the Secretary of State to consult the other players in the regulation of the NHSthe Care Quality Commission, strategic health authorities and the Audit Commissionbefore taking action against Monitors non-executive directors.

Mike O'Brien: Suspension would be used only on rare occasions, when serious concerns raised about performance or conduct required further investigation. The Secretary of State intends to delegate his power to suspend members of Monitor to the Appointments Commission. The commission is independent and expert, and it has established a clear policy for determining whether there is a case for suspension.
Where there are allegations of incapacity or misbehaviour, the commission will undertake a swift initial investigation to assess whether are there sufficient grounds to bring suspension proceedings. The commission will therefore take the action. Its chair could use emergency powers to suspend someone following consultation with her executive or, in her absence, the deputy chief executive, and with at least two of the commissions appointed commissioners.

Stephen O'Brien: I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman adjourned the Committee without Question put (Standing Order No. 88).

Adjourned till this day at Four oclock.